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DON LEMON, CNN ANCHOR: Good evening, everyone. I'm Don Lemon.

Tonight, a CNN special event, "Fixing America's Schools."

(BEGIN VIDEO CLIP)

ARNE DUNCAN, EDUCATION SECRETARY: We're going to keep talking about the problem for the next two decades or are we going to fix it?

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LEMON: This year, taxpayers will spend about $11,000 for each of the 50 million public school students in this country. Many children will excel. Too many will not.

Nationwide, the dropout rate remains alarmingly high especially among African-American and Hispanic students. And our international test, our students continue to lag behind in core subjects like math and science.

So, over the next hour, if you care about education, if you have a child or a grandchild in school, you'll want to stay with us.

You'll hear why students in Hong Kong routinely pass with flying colors. How No Child Left Behind has led to some wholesale cheating by administrators. And one family's emotional struggle to finance their daughter's college education.

We're about to take you inside a CNN exclusive no-holds-barred town hall meeting where parents, students and teachers take their questions straight to Education Secretary Arne Duncan. We sat down yesterday at Carver elementary -- Early College, I should say -- high school right here in Atlanta and I began by asking the secretary: considering the billions we spend each year, is education a right or a privilege?

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DUNCAN: Every child in this country -- every single child must have a world class education. And I've said repeatedly, there was a day, you know, 30 years ago in which if you dropped out of high school that was actually OK. You could drop out of high school and go get a job someplace and support your family and own a home.

There are no good jobs out there for high school dropouts. There are virtually no good jobs for a high school graduate. Some form of higher education has to be the goal for every single one of our young people here. Four-year universities, two-year community colleges, trade, technical and vocational training -- that has to be the case for every single child. So, it has to be a right, and it can't just be a watered-down, low expectations education.

It's really -- we really have to raise -- and we'll talk about it a lot today -- we really have to raise the bar for all the students. I'm convinced we have to educate our way to a better economy. That's the only way we're going to get there from here.

LEMON: All right. You mention raising the bar for all the students. Let's start with a student question first. I want to get the students in. Go ahead.

JOSE AVALLO (ph), HIGH SCHOOL SENIOR: Hello. My name is Jose Avallo. I'm a senior in high school. From experience, I know we have a shortage in books. And without books, basically the teachers can't do their jobs. So, what is your plan on that?

DUNCAN: Well, we want to continue to invest significantly more resources in education. I think we under-invest in education. And if there aren't books, if there aren't computers, if halls aren't clean, you know, if you don't have gorgeous libraries like this, it makes it harder to learn.

I want to be clear, we want to get invest more resources but we don't invest in status quo. We want to get you dramatically better. And we have a dropout rate that's too high. Dropout rate in this country is about 27 percent -- 1.2 million students leaving our schools for the streets. That's morally unacceptable, economically unsustainable.

And so, we need to invest. And this is a very, very tough time. Local districts, state level, huge cuts in funding. We're very worried about that.

One of the things I'm now pushing before Congress is another emergency education funding bill to save teachers' jobs around the country. We worry not just here in Georgia, but around the country -- anywhere between 100,000 and 300,000 teachers losing their jobs going into the next school year. We can't afford to get worse. We have to get much better.

I worry about cuts in extra-curriculars. I worry about schools going to four-day weeks. I worry about folks losing art and dance and drama and music.

And so, there's a series of things that every child should have access to, books being at the heart of that, but so is a five-day school week. I'd argue a six or seven-day school week. You may not like that idea. I think we need a lot more time in school -- longer days, longer weeks, longer years.

We need to get and to educate our way to a better economy and we need to invest. LEMON: And, Secretary, they've got a -- you know, I'm going to be the teacher today. So, again, do you feel that your question was answered? He wants to know specifically about books. What's your plan for books, Secretary?

DUNCAN: Well, what we're trying to do is put unprecedented resources out to states and how states use their money. We have almost $100 billion in stimulus package in the Recovery Act. How the states use that money is up to them, but there's never been such a commitment at the federal level to invest in local school districts.

LEMON: We have another student -- we have one more student that wants to ask a question.

TERRENCE HAUSWIRTH (ph), HIGH SCHOOL JUNIOR: I'm Terrence Hauswirth. I'm a junior here at Carver Early College. And I want to know if you feel that arts and music classes need to be eliminated.

DUNCAN: Absolutely not. They do not need to be eliminated. And again, dance, drama, art, music, chess, debate, academic, decathlon. Our students need a well-rounded education and we have to get back to that as a country.

LEMON: Real quickly, I want to ask you about this. This is something that's in the news. It involves paddling. Twenty states, it's still legal to paddle. There's a -- Congress is trying to ban it.

Do you think that paddling should be banned or should be legalized in schools?

DUNCAN: Well, I think that's a local decision. But -- am I fan of hitting kids? Absolutely not.

LEMON: That's the answer.

(LAUGHTER)

LEMON: It should be left up to the schools locally, but are you a fan of hitting kids -- no.

DUNCAN: I'm not a fan of hitting children. Absolutely not.

(END VIDEOTAPE)

LEMON: And here's a question for you. Are American students less intelligent than kids in other countries?

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DUNCAN: Our students are as smart, as talented, as committed as students anywhere in the world. I have absolute faith in their abilities.

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LEMON: Yet, many U.S. schoolchildren continue to fall short in core subjects. Secretary Duncan explains why and how to fix it.

And later --

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UNIDENTIFIED MALE: My wife and I are college-educated and have three elementary schoolchildren. And by the time they go to college, I'm not sure if we're going to be able to afford it.

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LEMON: That is an issue that weighs heavily on the minds of parents all across America. We'll talk about solutions for the crushing cost of higher education.

And don't just sit there. Be a part of this conversation. Make sure you send me your message -- send me a message on Twitter, on Facebook -- Twitter.com/DonLemonCNN or Facebook.com/DonLemonCNN. And make sure you check out my blog at CNN.com/Don.

I want to hear what you think. We'll pass your comments on to Secretary Duncan as well.

You know, it's practically a cliche that Asian students do better academically than most other groups. There is some truth in it. You're about to find out why from CNN's Kristie Lu Stout with a glimpse inside the Hong Kong education system.

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KRISTIE LU STOUT, CNN CORRESPONDENT (voice-over): Hong Kong junior Yi-Wei Liu is at ease at the keyboard and with the college boards. On the SATs, he scored a whopping 790 in reading and 770 in math -- 99 and 98 percentile scores. The secret: his afterschool tutors.

YI-WEI LIU, HONG KONG STUDENT: I'm doing pretty well at school in no small part, thanks with these tutors.

STOUT: Yi-Wei spends four hours a week with tutors on various subjects, including English and critical reading at Hong Kong's Kelly Yang Project.

KELLY YANG, MANAGING DIR., KELLY YANG PROJECT: There's a myth that every Chinese kid is good at math. But aside from that, I think it's just that they have the access to the school, to the extracurricular activities, which are going to be helping them with the different subjects. And there's also a lot of priority at home for them to do well. Their parents won't take "B" for an answer.

STOUT: Students in Hong Kong spend less time in school than students in the U.S., and yet, they often outperform their American peers in reading, math and science exams. Why?

(on camera): It may all come down to tradition. I'm in Hong Kong's Wong Tai Sin Temple and this is the Confucian Hall, which honors the philosopher. And his philosophy is self-improvement. Researchers say it's the Chinese tradition of emphasizing education as the top factor behind Hong Kong's top scores.

(voice-over): Gerard Postiglione has been studying the education system here for more than 20 years.

GERARD POSTIGLIONE, UNIVERSITY OF HONG KONG: Hong Kong in this region. The Confucian society is a very test-oriented. There's a heritage of that. But there are also some other pragmatic reasons why. If you pass examinations, you get into better schools, you get into better universities.

STOUT: With such an intense emphasis on getting into that better university, tutoring is huge in Hong Kong. According to a recent survey, more than half of Hong Kong students get private tutoring.

LIU: The entire Hong Kong school community is very, very competitive. When I go to the U.S., for example, or even the U.K., I find that people are a lot more relaxed.

STOUT: Yi-Wei is not happy with his SAT writing score, a mere 680. Mind you, that's a 94 percentile performance.

Kristie Lu Stout, CNN, Hong Kong.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

LEMON: We asked people to submit questions via Facebook and Twitter. And here is one from Stacey Evens on Facebook. She said, "Want to fix American schools? Then fix American parents and households. When is America going to wake up and see that we have a society problem, not a school problem?"

Do you agree that, parental responsibility?

DUNCAN: I think we all have to step up and move outside our comfort zones.

What bothers me in education is we all like to point fingers. Parents point fingers at teachers. Teachers point fingers at parents, vice versa. And that doesn't help students learn. When adults fight, you know, no benefits for children.

Do parents have to take more responsibility? Absolutely. And the president and I continue to challenge folks to turn off the TVs, to spend time with their children. We also need to challenge schools to be more welcoming to parents and to create opportunities for parents to come in and be engaged. And so, we all need to do more.

But parents have to be a part of the solution. Parents are always going to be students' first teachers and they're always going to be their most important teacher.

LEMON: Should there be some sort of mandate? I don't know if that's the right word parental involvement in schools, going to PTA meetings, making sure parents check their home work and get involved in what their kids are doing.

DUNCAN: It's the kind of thing -- I don't think you can legislate it and sort of talk about these things. But you absolutely need to encourage it and create a climate where parents want to do that.

And it's tough out there for parents today. You have parents working one and two and three jobs trying to make ends meet. But there's nothing more important a parent can do than to be actively engaged.

What always bothers me is, often, the only time parents and teachers interact is when there's a problem with the child. And you have to build an ongoing relationship. And when there's constant communication between parents and teachers -- good days, bad days -- that child can't fall through the cracks. They know that there's a united front working together.

LEMON: Is there a parent in the audience we want to speak to?

FERNANDA MYER (ph), PARENT: My name is Fernanda Myer. I'm from Kaplan Test Prep. As we saw on the bit just before, students in Hong Kong do lots of tutoring after school and on the weekends.

Are there plans within our current administration or future to increase our competitiveness by putting things like that into place here such as Saturday school or longer school hours?

DUNCAN: So, there's lots there, but the reality is, our young people today are not competing for jobs in Atlanta or the state of Georgia. They're competing for jobs in an international economy. And we have to prepare our students to be successful in that competitive environment.

Our students are as smart, as talented, as committed as students anywhere in the world. I have absolutely faith in their abilities. I think we have to level the playing field for them.

What does that take? A couple of things. In our country and far too many places, we have dummied down standards due to political pressure, not due to what's good educationally or not due to what's good for our children's futures. We have to raise the standards significantly.

College and career ready standards for every single child in this country. And I'm so pleased that you have 48 governors, 48 state school chief officers working together to help us get to that point. This is being driven at the local level which is where it should be today.

LEMON: What specifically, though, is the administration -- what are you doing in order to enhance global competitiveness among our students? What are the specifics?

DUNCAN: A couple of things. First of all, we're actively encouraging this move to college and career ready standards. That is a huge, huge push. And, again, that's being led at the state level, which is where it should be at the local level.

But has to have -- we have dummied down standards due to political pressure. We're lying to children far too many states around the country today. That has to end -- huge movement there.

Secondly, everywhere I go, including here today, we try to talk about adding time and highlight schools as successful. And the common denominator in every successful school -- I guarantee you -- a school like this here, Carver High School, that's turned around, those students are working harder here than they did five years ago and guess what, the dropout rate has gone down dramatically.

LEMON: But what's the response? When you say more time, that means you have to pay teachers, you have to pay tutors, you get -- parents have to be involved. That's more time, more money.

DUNCAN: I think we have to be a little more creative. And that's starting to happen around the country. But it's thinking differently. Schools should be community centers. Schools should be the hearts of the community with a wide variety of afterschool programming.

(END VIDEOTAPE)

LEMON: And still ahead, Secretary Duncan says cutting arts from school curriculums is short-sighted.

(BEGIN VIDEO CLIP)

DUNCAN: If you want a child to do better in math, you know what might help? More music. If you want a child to do better during the class day -- how about more recess?

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LEMON: We continue our exclusive town hall meeting with U.S. Secretary of Education Arne Duncan.

Plus, a check of your day's top stories.

(COMMERCIAL BREAK)

LEMON: More on our special "Fixing America's Schools" in just a moment.

First, let's check some of your headlines.

You can add President Barack Obama to the list of people who are forced to cancel travel plans by that volcano in Iceland. The volcanic ash that shut down air travel across Europe has caused Mr. Obama to call off his planned trip to the funeral for Poland's president. The U.S. ambassador will represent the United States at tomorrow's service.

Toyota has issued yet another recall this time for 600,000 Sienna minivans. The Japanese automaker says the recall is necessary because of a problem with the spare tire cable. Corrosion from road salt can cause the cable to snap, dropping the spare into the road, a danger to other drivers. Toyota says it is working on a solution to that problem.

Discovery is heading home. The space shuttle undocked from the International Space Station this morning and will attempt to land Monday at Florida's Kennedy Space Center. Only three missions remain for the space shuttle program.

A major standardized test given to public schoolchildren in Georgia and somebody changed their answers after the fact.

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MIKOLE HARDEN, PARENT: I hope that there's no cheating. And if it is cheating, there need to be a punishment for it.

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LEMON: How could this happen? Education Secretary Arne Duncan addresses the controversy at an exclusive town hall meeting with parents, students and teachers.

And later, why many U.S. students don't perform as well academically as their peers in other countries.

(BEGIN VIDEO CLIP)

DUNCAN: I think there's so much that we've gotten wrong in this. We've dummied down standards. It's been fill in the bubble sheets.

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LEMON: In other words, the way to improve students' performance is to make them crack the books.

That and much more with Education Secretary Arne Duncan.

(COMMERCIAL BREAK)

LEMON: If you have spoken to a teacher, a parent or a student lately, you've probably heard some strong opinions about No Child Left Behind. It is a federal law that holds teachers and administrators directly responsible for their students' performance on standardized tests. The pressure to succeed is so great and the penalties for failure are so severe that some public school administrators are being accused of cheating.

We investigate one case in Georgia.

(BEGIN VIDEOTAPE)

LEMON (voice-over): Mikole Harden is worried.

(on camera): Are you the only parent who's concerned about the performance?

MIKOLE HARDEN, PARENT: No, by all means.

LEMON (voice-over): Someone may have changed the answers on the standardized test at his daughter's school last year.

(on camera): But you have concerns?

HARDEN: Of course, I have concerns. Like any other parents, I have concerns. I hope that there's no cheating. And if it is cheating, there need to be a punishment for it.

LEMON (voice-over): And he's not alone. The state of Georgia is investigating 10 percent of its elementary and middle schools, 191 of them, because of moderate to severe concern over test results in 2009.

(on camera): When the answer sheets like these were scored, the computer scanners could tell when the bubbles were erased and the answers changed.

(voice-over): Kathleen Mathers heads the state audit.

KATHLEEN MATHERS, GA. GOV.'S OFFICE OF STUDENT ACHIEVEMENT: It's not just that someone had changed a bunch of answers. It was that when they changed answers, they got the answer right as a result of that change.

LEMON: Classes with an unusually high number of these changes were flagged.

MATHERS: It's sort of like having a blizzard in Fort Lauderdale in the middle of July. You know, in theory, it could happen. It's just so incredibly unlikely that you really need a substantial explanation.

LEMON: Usually, when we talk about cheating, the focus is on kids. In Georgia, the finger is being pointed at teachers and administrators.

CNN obtained affidavits in the case of two administrators at an elementary school in DeKalb County accused of tampering with tests in 2008.

Former Principal James Berry admitted they went into an office and began to erase answer sheets and changed answer.

Doretha Alexander, the assistant principal, says she read the answers to Berry. "He needed for 26 students to pass for us to may AYP."

AYP is "Adequate Yearly Process," an improvement standard set by the federal No Child Left Behind Act. Schools that repeated fail to meet AYP face sanctions. Berry was charged with public records fraud, paid a fine and is on probation. Alexander was transferred and completed community service.

MATHERS: We have done some work with our monitors.

LEMON: Today, Mathers is working with the state school board to keep it from happening again.

MATHERS: As a former teacher, I would say we're better than that.

LEMON: Georgia students are now taking the 2010 CRCT test under new guidelines. And watching over the whole process, state test monitors aimed at making sure these tests can be trusted.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

LEMON: We hear all the time from students, from parents, even from teachers, you know, standardized tests, emphasis are being placed here. That's where we receive money based on how our students, our schools perform.

Some of the criticism from No Child Left Behind, and even from Race to Top -- too much emphasis on standardized testing. Is it forcing people to do things like this, especially teachers and administrators?

DUNCAN: Yes. These are really good and tough and complicated issues. Let me be very clear: no one should ever cheat on a test. And that behavior is absolutely unacceptable.

What we have to understand is that great teaching, great instruction, leads to good results. I think there's so much that we have gotten wrong with this. We've dummied down standards. It's fill in the bubble sheets.

And we need to think about, if you want a child to do better in math, you know what might help? More music. If you want a child to do better during the class day -- how about more recess?

And I think we've really started to getting this idea of narrowing the curriculum and too much pressure on that is a problem. And so, what do we need to do? A number of things: we need better assessments; we need to get back to a well-rounded curriculum.

And what I've been pushing very hard is, I want to focus on growth and gain -- how much are students improving each year? Let me give you --

LEMON: And less on standardized testing?

DUNCAN: Standardized testing being a piece of that. But looking at other things as well. Graduation rates, a high school like this where the graduation rates have gone through the roof, you have to take that into account. That is very important. You look at outcomes.

But let me be clear: on testing, do we need to have annual evaluations? Yes. I think we do. I think they need to be a much higher caliber and we're investing $350 million to create the next generation of great assessments and, again, it's going to begin (ph) at the local level.

But we have to make sure that we don't ever tolerate this kind of behavior. And we have to make sure that students are getting the kind of well-rounded education they need so they can demonstrate their abilities in a testing situation and do just fine.

LEMON: Let's hear from someone in the audience.

BECKY SAARELA, TEACHER, DUNWOODY HIGH SCHOOL: My name is Becky Saarela, and I'm a teacher at Dunwoody High School.

And I'm concerned that we are raising a generation of test- takers. And I'm just wondering how the new reform is going to address that and put less pressure on the standardized testing scores and more focus on the day-to-day performance of our students and their overall growth.

DUNCAN: Again, I think we need much better assessments. We need to be assessing not just your ability to fill in a bubble sheet but your critical thinking skills. And I think we have a huge chance now to change that conversation with this massive investment we want to make and we have, again, state leaders really pushing very, very hard to have that next generation of assessments.

We want to look at graduation rates -- how are students doing each year in terms of -- not completing high school but are they truly college and career ready. And so, there are many things that we need to take into account. Test scores being one of them, but by no means the only one.

LEMON: OK. I want to get one more as it concerns testing, right, standardized testing?

ROBERT WALLER, FORMER TEACHER: Yes. I'm Robert Waller, a former teacher in Atlanta Public Schools.

How do we encourage teachers -- how can leaders and school administrators encourage teachers to move outside of the box and be creative in their teaching approaches so that they can reach all needs of students and so that kids can have a quality world-class education and that standards would be met at the same time?

DUNCAN: I think teachers are unsung heroes in our society today. I think the vast majority of teachers do an extraordinary job, are working unbelievably hard, never had less resources than they do today. Children come to school with more challenges than ever before. We need to do a much better job of supporting those teachers, mentoring them, providing meaningful professional development, meaningful career ladders.

We don't invest in teachers at our own peril. And I've challenged schools of education. I think they need to do a much better job of preparing teachers to come into education. More practice, less theory, more hands-on experience. But we have to do a much, much better job of helping teachers be successful and rewarding excellence. That's one thing that always amazes me in education. We've been scared to talk about excellence. Great teachers make a huge difference in students' lives. Every kind of study shows three great teachers in a row and that average child will be a year and a half to two grade levels ahead.

Three bad teachers in a row and they child will be so far behind they may never catch up. We need to recognize excellence, we need to reward it. We need to shine a spotlight on it. We need to clone those teachers. Put them in leadership positions to help them share their knowledge. We have to stop being scared of talking about excellence. Great teachers, great principals. Talent matters tremendously in education.

(END VIDEO CLIP)

DON LEMON, CNN ANCHOR: And we're just getting started here. Coming up Arne Duncan gets to the heart of the matter.

(BEGIN VIDEO CLIP)

DUNCAN: The custodian makes sure the building is spotless and this environment where students want to learn. The cook who is making sure that the food is nutritious. The people working the after school program. Every adult working together. That's what makes phenomenal world class public schools.

(END VIDEO CLIP)

LEMON: Rewarding excellence in the classroom is one key to academic success. And later how the economic future of every American is tied directly to its public schools.

(BEGIN VIDEO CLIP)

DUNCAN: Poverty is not destiny. And anyone that tells you poverty is destiny is lying to you and they absolutely have low expectations for children.

(END VIDEO CLIP)

LEMON: More ahead from our exclusive town hall meeting with the top educator in the U.S. as he offers his solutions to fixing America's schools.

(COMMERCIAL BREAK)

LEMON: Welcome back, everyone, to our exclusive town hall meeting with U.S. education secretary Arne Duncan. Before the break we heard Secretary Duncan touting the need to find, nurture and keep our best and brightest teachers. I asked him whether merit pay should be part of that equation.

(BEGIN VIDEOTAPE)

LEMON: A big part of the debate, secretary. Merit pay for teachers, yes or no?

DUNCAN: I think we need to reward excellence in education and we need to be very thoughtful about how you do this. You need to create these programs with teachers and look at range of factors. I'm a big fan of supporting not just individuals but entire teams where you have high performing schools. Great teachers, great principals and also custodians, the security guards, also the lunch room attendants. Every adult in the building with high expectations.

But yes, I said earlier and I will say it again. We need to reward excellence. I'd go further. We have a shortage of math and science teachers in this country. We've had that for a long time. I think where we have shortages in disadvantaged communities, inner city, urban and rural, we pay math and science teacher more money. Are we going to keep talking about the problems for the next two decades or are we going to fix it?

Where we have phenomenal teachers, phenomenal principals, yes, we need to reward it. And let me be clear, no one goes into education to make a million dollars. Teachers are the most altruistic people in the country. So if you're rewarding them a little bit with more money it's almost a symbolic gesture of saying how much we appreciate your hard work. We under invest in education. I think teachers are generally underpaid. But we absolutely undervalue, under appreciate great, great talent.

LEMON: I remember when I was growing up there were lots of people in my class who wanted to be teachers or you know, people in the community who were striving to be teachers. I don't hear that a lot these days. Let's talk to - there's someone in the audience who has a question.

FARAH KHAN, DENTIST: My name is Farah Khan. And I'm a dentist and currently a stay at home mom with three elementary school kids. My question to you is, is there any incentive built in for teachers to pursue higher levels of education themselves?

DUNCAN: Yes. This I think has been a huge problem. How do we create career ladders for teachers. How do those phenomenal teachers, master teachers, mentors teachers - who is taking those young teachers under their wing and helping them through the extraordinarily difficult first two, three, four years. There should be career ladders for teachers. And you know, best teachers, pick a number, 120,000., 150,000. Pick a number. I don't think we can reward those teachers that are changing student's lives every single day. I don't think we can reward them enough. I really don't.

LEMON: OK. And what's in place? What do you have in place in order to do it?

DUNCAN: We don't set teachers salaries obviously. That's done at the local level but we are putting out unprecedented resources. We're asking for about $900 million in the upcoming budget to reward great teachers and great principals. And those (INAUDIBLE) programs have to be set up thoughtfully. Have to include a lot more than test scores. Have to be done with teachers, not to teachers in collaboration.

And again, I would argue not just reward individual talent. Look at whole teams, look at whole schools that change students' lives. Every adult in that building is making a difference. The custodian that makes sure the building is spotless in this environment that students want to learn, the cook who is making sure the food is nutritious, the people working the after school program. Every adult working together. That's what makes phenomenal world class public schools.

LEMON: OK. One more. Do you have another question?

LISA NELSON: My name is Lisa Nelson and I'm about to go back to school to get my masters in special education. And what I have heard is that teachers are going to be paid based on their standardized test results. And I'm worried because I'm going to be in special education how this is going to affect me fairly.

DUNCAN: Let me be clear. Teacher compensation should never be based on just one test score. That absolutely makes no sense whatsoever. Every child, gifted, average, special needs, whatever - every child can learn. Every child can be successful and I want to see students grow and gain. I want to see improvement. I want to focus on growth.

And I think every teacher where you're seeing significant growth, in comparing students with similar abilities or disabilities to other ones, who are those teachers, who are those principals, who are those schools that are making a difference. I do want to shine a spotlight on that.

(END VIDEOTAPE)

LEMON: Attending college is part of the American dream. But high costs have put it out of reach for many families.

(BEGIN VIDEO CLIP)

DUNCAN: We want to make sure that every single child like that around the country has a chance to pursue that dream of higher education.

But first a check of the day's top stories. A volcano is disrupting air travel for countless people all around the world including the president of the United States.

(COMMERCIAL BREAK)

LEMON: More off our special "Fixing America's Schools" in a moment.

But first, just want to check in your headlines. Volcanic ash has shut down air travel across Europe and caused President Obama to call off his trip to Poland. Mr. Obama was going to attend the funeral for Poland's president who died in a plane crash last Saturday that also killed his wife and scores of top Polish government officials. The U.S. ambassador will represent the United States at tomorrow's service.

In Pakistan, suicide bombers killed at least 41 people in a refugee camp today in northwestern Pakistan. Dozens of others were injured. After the initial blast officials say people rushed to the scene to help only to be victims of the second explosion. The camp was filled with people who had to flee their homes during the military offensive against the Taliban. A Sunni militant group is taking responsibility for the attack.

If you missed Friday's deadline to return your census form, don't worry, you are not alone. Three in 10 Americans haven't sent the form back yet. Despite an aggressive campaign by the Census Bureau, this year's return rate is about the same as 10 years ago. Census workers will soon start visiting the homes of people who haven't returned the forms.

DUNCAN: It literally stopped students around the country as soon (INAUDIBLE) in Chicago from going to college. Students who worked hard, who had good grades.

(END VIDEO CLIP)

LEMON: How does it work to have thousands of colleges and universities across the country if some of the best students can't afford to go? Also -

(BEGIN VIDEO CLIP)

DUNCAN: We have to believe in our heart that every single child can be successful.

(END VIDEO CLIP)

LEMON: It all starts with positive attitude. Despite its many problems and flaws Secretary Duncan sees America's public schools as a glass half full.

(COMMERCIAL BREAK) LEMON: Welcome back to our special "Fixing America's Schools." I don't know anyone not stressed by the skyrocketing costs of a college education. CNN's Thelma Gutierrez introduces us to one family willing to risk everything for their daughter's degree.

THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): This is a story about a family who's willing to sacrifice everything to educate their children and break with the past.

VOICE OF ANNE MARIE GOMEZ: My father was a janitor. My husband and I were born and raised in east L.A.. I was seven months pregnant when I graduated from Garfield High School.

GUTIERREZ: By all accounts, Anne Marie Gomez wasn't supposed to make it. She was 17 with a baby. But she was determined not to become a statistic. So she married Antonio, went on to the University of Southern California, where she eventually earned a masters degree in health care administration.

UNIDENTIFIED FEMALE: Hi.

GUTIERREZ: We met the Gomezes in east L.A. at a fast food restaurant they own. Her husband runs it while she works full time as a business developer. Their income is about $90,000 a year. It sounds good but with a mortgage, two younger children and a struggling business, they're barely able to afford Kristen's tuition at Mary Mount College.

(on camera): So when your daughter needed $25,000 for her first year of tuition, what did you guys do?

ANTONIO GOMEZ: I pulled money out of my 401(k).

GUTIERREZ: Because of her parents' income, Christian doesn't qualify for many government student aid programs. So the family has come up with creative ways to fund-raise. They collect plastic bottles to recycle, they sell chocolate and even run 5ks for pledges to help pay for books and other expenses.

(on camera): You must reflect on the opportunity that your parents have given you to be here, to be able to go to school here and sacrifices that they have made.

CHRISTIAN GOMEZ: Yes, I do a lot. It is stressful at times. And I feel bad, but at the same time I just really appreciate it.

GUTIERREZ (voice-over): The Gomezes are also taking out loans to pay for college tuition which is rising three times the rate of inflation. At the same time, they're paying back $59,000 that Anne Marie borrowed 12 years ago to attend USC.

(on camera): Your family struggles each and every semester to be able to come up with the money to send her to school. What if you're not able to come up with that money?

ANTONIO GOMEZ: It is not - I want to buy a big house. I just want to provide for them. Provide for my kids, a better education.

GUTIERREZ: To pay them back, Christian's determined to graduate with honors.

Thelma Gutierrez, CNN, Los Angeles.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

LEMON: How can the average family, working class family, how are they supposed to be able to afford college?

DUNCAN: This is a huge challenge, working class, middle class. It's something we think about all the time. It's a real worry. What I'm so proud of due to the president's leadership and Congress's support, we recently pass the higher education bill that is going to bring an additional $36 billion into Pell grants for students over the next decade.

We did that simply by stopping subsidizing banks, not going back to taxpayers for a dime, and putting all that money into education and investing in our future, which is where it should be. Families can get a $10,000 tuition tax credit. And so we have to continue to work to make college more affordable. This is the biggest increase in funding since the G.I. bill. Massive resources going in. And we want to make sure that every single child like that around the country has a chance to pursue that dream of higher education.

We also need to really challenge universities to think about reducing costs. And I think families have to vote with their feet. You see some universities with runaway expenses. You see others going to three-year programs, going to no-frill campuses and we have a world class system. Thousands and thousands of universities around the country. Parents and students can go to those places where they're getting value for their hard-earned dollars. And where the costs are skyrocketing, I think those colleges are going to start to lose students.

LEMON: I want to hear from a parent but just even getting that money sometimes as we say, it's not just talking about it. You got to sometimes jump through hoops to get that money and sometimes even that isn't enough.

DUNCAN: Well, let me tell you what we've done. The FAFSA form, Financial Aid Form used to be a huge impediment to going to college. It was so difficult you basically needed a Ph.D. to fill it out. (INAUDIBLE) you don't have Ph.D. yet.

LEMON: A lot of people are agreeing with that.

DUNCAN: We've dramatically simplified the FAFSA form, made it much, much easier. It literally stopped students around the country - students as soon as I worked them from Chicago, students who worked hard, make good grades, they couldn't get through the form. It was crazy. It is dramatically simpler, trying to remove those hoops, remove those barriers and get in more money than ever before.

One other thing that I'd like to mention, Don. This is really important. Is that at the back end, once you graduate there's something called income based repayment now. And the mom there in the story talked about the loan she has to repay. Going forward what we're doing is we're reducing those loan repayments to 10 percent of your income so trying to make it much more manageable.

And very important, if you become a teacher, if you graduate from law school and work in a legal aid clinic or medical school, work in a disadvantaged community, after 10 years of that service, all of your loans will be erased. All of your loans will be forgiven. There's so much great talent that historically would have loved to be a teacher but they 60, 80, 100,000 loans they couldn't afford it. We're removing all those impediments. This is a law. This law passed.

LEMON: right.

DUNCAN: So this is a big, big deal for the country.

LEMON: I want to get a parent question in. Who has the microphone?

STAN BERMUDEZ (ph), PARENT: Yes. I'm Stan Bermudez. My wife and I are college educated and three elementary school children. And by the time they go to college, I'm not sure if we're going to be able to afford it. So I was wondering - and you mentioned a few things already. I could relate to the video.

What specifically is the administration going to do to approach rising college costs to make it affordable for everybody? It seems like it's becoming something that only the rich and wealthy will be able to do that and we're not rich and wealthy.

LEMON: That's a good question.

DUNCAN: It's a very real challenge. So again $10,000 tuition tax credits for the middle class. $36 billion in increased Pell grants over the next decade. And then income-based repayment at the back end to reduce those loan repayments and erase them after 10 years of public service. So these are real challenges. But this has been just I think amazing leadership by the president, supporting Congress to make these things happen. And I think we're changing the opportunity structure going forward in very, very significant ways.

(END VIDEOTAPE)

LEMON: We have talked a lot about solutions over the past hours. This may be the most important one. (BEGIN VIDEO CLIP)

DUNCAN: Children, when we give them opportunities, long-term support, guidance, great role models, great leadership, expect the best, every single child in this country can be successful.

(END VIDEO CLIP)

LEMON: Well, for Secretary Duncan, optimism is the most important lesson we can teach our children.

(COMMERCIAL BREAK)

LEMON: Welcome back to our special "Fixing America's Schools." A 100 percent graduation rate. That is the holy grail of public high school. The Urban Prep Academy in Chicago is one of those success stories we have told you about before on this very program. It happened under Arne Duncan's watch as CEO of Chicago public schools. Listen now as Secretary Duncan addresses the significance of that achievement and how it can be duplicated all across the country.

(BEGIN VIDEOTAPE)

ANTONIO SAUNDERS: Secretary Duncan, my name is Antonio Saunders. I'm starting a single gender sixth through 12th grade school here in Georgia. And one of the goals we have for this school is to graduate 100 percent of our students from high school and college. How is that meaningful accountability in your opinion?

DUNCAN: That's a dream. I thank you so much for your commitment and your support. Let me be very, very clear. Poverty is not destiny. And any one that tells you poverty is destiny is lying to you and they absolutely have low expectations for children.

Let me tell you a little bit about the Urban Prep story. That was the school - the old school was formed in the heart of the Southside of Chicago when I was CEO there. It had about a 60 percent dropout rate and had about four percent of students reading at grade level. 96 percent were not.

And so what we did is we closed it down. That was very controversial and very tough and huge, huge outcry but I just knew that children from that community could do much better. Came back. Three great innovated small schools, one of them Urban Prep. Same children, same building, same violence in the community unfortunately, same socio-economic challenges. Unfortunately often absent fathers in those families. Dramatically different results.

Children when we give them opportunities, long-term support, guidance, great role models, great leadership, expect the best, every single child in this country can be successful. I'm so proud of the hard work that happened there. We're seeing that start to happen around the country. And frankly, we need more young energetic, committed-educators stepping up to the plate and say "I know students can do better." Is this hard work? Absolutely. Extraordinarily hard work. Is it possible? I see it all around the country. Urban Prep is one of the shining lights that every lets us know every single child cannot just graduate but go on to higher education about.

LEMON: Urban prep is one of those stories that you, you know, put it on - you talk about it and you can't believe the response you get. Everyone wants it. Everyone wants that sort of school. But what's the reality? How do we get the country behind that sort of success?

DUNCAN: I think this is less about an intellectual battle. And this really comes from the heart. Do we have the courage to challenge the status quo to get dramatically better? And we have to have the courage to do the right thing by children. And we have to believe in our heart that every single child can be successful. I think quite frankly too many people don't really believe that every child can be successful and they give in to the myths and the stereotypes.

But I promise you -- and this comes from a lifetime experience. My mother has run an inner city tutoring problem for 49 years in the heart of the south side of Chicago. And I grew up with a set of friends who happened to be really very poor, happened to be African- American, happened to not come from the most functional families. One is a Hollywood movie star, Michael Clarke Duncan. One is literally a brain surgeon. The guy who taught me the teenager cary holly (ph) is one of IBM's worldwide leaders. Another one, Ron Raglan helped me lead and managed Chicago public schools. Why? Because they had my mother and other people in their lives that cared about them and stuck with them through good times and bad.

And so I've just been so fortunate from the time I was a baby to see what's possible with opportunity. This is all about opportunity, supports and high expectations.

LEMON: And if it can happen in that neighborhood on the south side of Chicago, it can happen.

DUNCAN: It can happen anywhere. And it is happening. For all of our challenges. The high drop out rate, the reason I'm so hopeful and optimistic, we've never had more high performing world class public schools than we do today. We just need to take that to scale. We need to take what's working to scale.

LEMON: Thank you, Secretary Duncan.

DUNCAN: Thanks for the opportunity. Thanks so much for doing this show.

LEMON: Thank you. And thank you guys. You were great.

(END VIDEOTAPE)

LEMON: We hope you enjoyed it. Secretary Duncan says he's going to do it again with us.

I'm Don Lemon. I'll see you back here at 10:00 p.m. Eastern. A CNN special investigation begins right now.